Should investors turn their attention to commercial property investment?

The sector has attracted a flurry of investment over the past few years and it appears that 2014 is set to be a game changing year.

Research from Cushman & Wakefield showed that in the 12 months to June, investment in the asset class increased by 49% to £58 billion, with around 40% of this capital invested by overseas investment.

Although capital values are still 29% below their 2007 market peak, values have recovered by 28% and according to the IPD UK Monthly Property Index, the sector has performed well in the first 9 months of the year, returning 14%.

An improving economic outlook seems to have drawn investors to the asset class. This trend is set to continue in light of the UK becoming the fastest growing economy in 2014 according to the International Monetary Fund.

Property experts forecast that 2014 will end with total returns from commercial property investment higher than those seen in 2013.

International investment

The UK’s commercial property market has attracted investment from across the globe and it’s not just London and the south east that has benefitted from this international injection of cash. Regional overseas investment into alternative commercial assets increased to 20% in the first 6 months of 2014.

Competitive prices, rising yields and a growing demand due to a lack of supply have led to a rise in investment in the regions.

The future of the sector

As experts forecast a positive end of the year for 2014, investors should look to what 2015 might hold for the market.

The UK’s general election may put off some overseas investors, as a change of government may be viewed as less property friendly however; occupier demand is expected to continue to push up rental values in key locations across the country.

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Whilst Experience Invest has an office in Hong Kong, the company and individuals representing Experience Invest are not licensed to and do not deal with any property situated in Hong Kong. Experience Invest is only authorised to market and to sell properties which are based in the UK.

Whilst Experience Invest has an office in Hong Kong, the company and individuals representing Experience Invest are not licensed to and do not deal with any property situated in Hong Kong. Experience Invest is only authorised to market and to sell properties which are based in the UK.